BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 429 (Dahle) - Public contracts: preferences: forest products.
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|Version: June 29, 2015 |Policy Vote: N.R. & W. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 429 would establish a bid preference for state
contracts for lumber and other solid wood products that are
harvested in compliance with the Z'berg-Nejedly Forest Practice
Act or verified under a Compliance Offset Protocol for U.S.
Forest Projects adopted by the Air Resources Board (ARB).
Fiscal
Impact:
Onetime costs of up to $100,000 to the General Fund for the
Department of General Services (DGS) to promulgate regulations
that would establish how the bid preference in this bill would
interact with other existing bid preferences.
Potential legal costs to the General Fund as a result of legal
actions challenging DGS's implementation, or lack of
implementation, of this bill.
Background: Existing law gives bid preferences to specific types of
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contractors or for projects in certain areas. Generally, various
Government Code sections establish the programs and DGS' State
Contracting Manual specifies program parameters and compliance
requirements.
Proposed Law:
This bill would establish a bid preference in state contracts
for lumber and other solid wood products that are harvested in
compliance with the Z'berg-Nejedly Forest Practice Act or
verified under a Compliance Offset Protocol for U.S. Forest
Products adopted by the State ARB if price, fitness, and quality
are equal and to the extent consistent with federal law. This
preference would only apply to a state agency that directly
contracts for specified lumber and other wood products. Paper
and other types of secondary manufactured goods would not be
subject to this bid preference.
This bill would also make a number of findings and declarations
regarding the importance of forested lands in California both
for the environment and the state's economy.
Related
Legislation: AB 2994 (Frommer) 2004 would have required state
agencies to give preference to the purchase of lumber and
certain solid wood products harvested from forests in California
when price, fitness, an quality are equal. AB 2994 was vetoed
and in the veto message of Governor Schwarzenegger stated, "The
preferences imposed by this bill could result in costly legal
challenges, retaliation by other states and nations, and bid
protests from those claiming the preference should be granted
and those objecting to it."
AB 994 (Parra, 2007) would have established a similar bid
preference. AB 994 was ultimately amended into a bill dealing
with another topic.
AB 199 (Holden, 2013) would have required specified state
agencies to purchase agricultural products produced in
California if certain criteria are met. AB 199 was vetoed by
Governor Brown.
AB 429 (Dahle) Page 2 of
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Staff
Comments: The author has committed to delete the provision of
the bill that would give a bid preference to lumber and solid
wood products that are harvested in a Compliance Offset Protocol
for US Forest Products adopted by the ARB or any other offset
protocol linked by the ARB. As this provision will be removed by
author's request should this bill move forward, this analysis
does not analyze any potential costs associated with that
provision.
To implement this bill, DGS anticipates that it would need to
develop regulations to determine how this bid preference would
interact with existing bid preferences. For example, the
regulations would address how a bid from an out-of-state
business owned by a disabled veteran would be ranked against a
bid from an in-state business for lumber harvested in compliance
with the Forest Practice Act. DGS estimates that developing the
necessary regulations would likely cost no more than $100,000
for one year.
This bill would require the suppliers to self-certify that the
wood products are harvest in compliance with the Forest
Practices Act. Staff notes that compliance with the Forest
Practices Act may be fairly easy to verify for the purpose of
investigating the accuracy of the self-certification. However
should the bill be expanded to give preference to lumber that
meets other criteria, DGS may have costs associated with
investigating the accuracy of the self-certification either
because of a complaint or to ensure program integrity.
Staff notes that this bill only creates a bid preference "to the
extent consistent with federal law." This provision was added in
recognition that such a bid preference could be challenged as
violating the Commerce Clause in the US Constitution which
establishes the exclusive federal authority to regulate commerce
with foreign nations and among the states. It is unclear who
would make the determination on whether the bid preference is
consistent with federal law. Staff notes that it is reasonable
to assume that DGS would likely face legal challenges either
from those who think that the bid preference is legal and those
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who think that it is unconstitutional, depending on whether DGS
implements the preference. These legal costs are unknown.
Proposed Author
Amendments: The author proposes to delete reference to the
Compliance Offset Protocol adopted by the ARB on page 4 lines
17-23.
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